Determining how to calculate lawn services and their costs is not as easy as it sounds. From transportation of equipment to the amount of fuel being used by each piece of equipment, there are many things to consider. Taking the time necessary to break down all of the expenses associated with running a lawn care service, in addition to operational expenses while providing a service, can be time consuming and tedious. Use this article to get started on calculating each service precisely and thoroughly.
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Calculate lawn services
Calculate the costs for daily overhead. In a lawn service, overhead or cost of operations includes the expenses of equipment storage and leases, office management, telephone and answering services, debris removal, taxes, vehicle leases, licensing, Internet, insurance, legal fees and any other routine type of operating expense. Add all of these together and this will be the total overhead to run the business, not including conducting lawn services. Divide this number by the number of operational hours per week. In other words, if total operations are $2,400 per month and there are a total of 208 monthly operational hours, the total expense to run a lawn care service is $11.53 per hour. Set this number aside as it will be used later.
Calculate the cost of transportation to and from a site. Every time a company vehicle moves, it costs the business money and a lawn service is no different. Every vehicle has mileage or kilometer costs associated with it. These can be found in the user manual or listed on the original sticker. If using a truck with a trailer, the cost of operation may be a little bit higher as more fuel is required to run the heavier vehicle. To calculate mileage or kilometer costs, note the number of miles used between each fueling. If 100 miles are traveled and it cost $30.00 to fill the tank, your cost per mile is $.30 per mile. To determine the cost per lawn service for a specific site, multiply .30 by the distance to and from the area where the lawn service is to be provided. If traveling 30 miles round-trip, the cost for transportation is $9.00.
Calculating manpower and time can sometimes be difficult. Each lawn service has different requirements and this poses a challenge when calculating or estimating an accurate expense. Take the time to visit the site and determine how much labor it will take to adequately complete the service. If a lawn mowing takes two hours with one person but can be cut in half by adding a second person, consider making the job more efficient by adding the additional laborer. To calculate labor costs simply, multiply the hourly wage by the number of laborers. If the lawn service will take one hour with two laborers who work for $9.00, then your total labor cost is $18.00.
Calculate the maintenance cost of equipment by using historical expenses. Oil changes and blade sharpening cost money. Take the total cost of maintenance per month and divide that by the number of operating hours. In this case, the monthly equipment operating expense is $226.20. Divide this by the number of equipment operating hours to determine hourly maintenance costs. If equipment is running six hours per day, 26 days per month, the operating hours is 156. $226.20 divided by 156 results in an hourly maintenance cost of $1.45 per hour.
Add up the totals. For the purpose of this demonstration, assume that the lawn service being provided is 30 miles round trip, requires two laborers, and will take one hour to complete. Our cost for the lawn service will be as follows:
Cost of Operations: $11.53 Cost of Transportation: $9.00 Labor: $18.00 Maintenance: $1.45
Total cost for the lawn service provided is $39.98.